Sophie has everything - blonde hair, good looks, a charming rotter of a boyfriend, and a flat in Notting Hill. Her best friend Clare covets Sophie's lifestyle. Exiled on the "wrong" side of town in unglamorous Hackney, Clare would do anything to get to West Eleven and hang out with media celebs in Portobello Road bars and, if possible, with Sophie's boyfriend as well. Sophie, however, seems to be keeping strange company with the man upstairs, a writer, who, it turns out, is dead.

"The best man is a dead man," Clare says laconically. Plain and bespectacled, she is one of Anne Billson's most memorable creations, a ruthless, detached, self-deprecating heroine who draws puddings for a living and religiously studies the "in-crowd" in an effort to become a member. Even though it is rumoured that a man killed himself in the top flat of Sophie's house, Clare moves in at the earliest opportunity, and is subjected to the Curse of Hampshire Place.

As in her first novel, the vampire tome, Suckers, Billson creates a satirical, misanthropic world with sharply delineated characters. There is Graham the feminist with his plimsolls and handknitted tank tops; dopeheads Lemmy and Dirk who decorate houses, Walter Cheeseman, the soft-porn director who lives in the basement, and Marsha, the do-gooder on the ground floor.

The greatest crime in Billson's Stiff Lips world is to be nice. Clare, Sophie and Sophie's insufferable friends are studies in bitchiness, scoring points off each other with stinging, schoolgirlish repartee. Female friendship may be held up for ridicule, but men don't come off too well either. They are misogynistic, vain and dim, and it is not surprising that when Clare takes up with Robert, the invisible ghost writer, she concludes that it is advantageous to date a man she can't see.

As in Suckers, one of the main characters of the novel is London itself, From Hackney to Ladbroke Grove, Billson depicts the city's peculiar social stratification, divided not so much by class as by job and dress sense. The other star character is the house in Hampshire Place. In this modern Gothic novel, Sophie's house becomes the focus of murder and mayhem, the place where the serial killer, the Butcher of Balham, lived, and where The Drunken Boats, a very bad 60s band, partied and played. Every member of the group has since died in mysterious circumstances and the thump of their music still haunts the house.

Billson has plotted her horror story with pace, timing and graphic imagery. She makes an event of mundane detail - "the small-scale model of one of the Klingons from Star Trek" that Lemmy loses in a room he has been decorating, or an accidental kiss with Graham that leaves Clare's Poppy Red lipstick "radiating from my mouth like an exploding nebula".

She also delights in the grotesque, describing every angle of the man in the mirror slitting his throat, the domestic argument that ends with a woman's eye being gouged out by a fork, and the female party-goer who ends up impaled on the railings outside Hampshire Place.

The only drawback to the tale is the way it is structured as a flashback, with Clare recounting events to her friends. Though a familiar Edgar Allan Poe-ish device, it detracts from the immediacy of the story. And Sophie, a gloriously well-observed character, seems to disappear halfway through the narrative, reappearing at the end almost as an afterthought.

Her re-entry coincides with the house's Halloween party, a macabre event packed with local drinkers, ghosts and media types. It is here that the book reaches its caustic, comic climax.

With Stiff Lips Billson overturns the cliches of the horror genre, establishing, in their stead, her own original voice.